Oil and gas pipeline demand to surge through 2016

A surge in demand for pipelines and other oil and natural gas infrastructure will sweep the United States for the next four years, driven by growth in the nation’s newest energy corridors, according to researchers at The Freedonia Group.

Pipeline capacity in the Bakken Shale in North Dakota and Montana will lead the pack, more than doubling by 2016, the research firm forecast. Freedonia also projected the Keystone XL pipeline will win federal approval, further driving infrastructure growth.

In total, demand for oil and gas infrastructure across the country will rise more than 6 percent each year, hitting $12 billion by 2016, the researchers predicted. In 2011, the industry demanded about $8.9 billion in new oil and natural gas infrastructure.

Drilling rigs have proliferated across North American regions previously untouched by oil and natural gas production, creating a sudden need for gathering systems, pipelines and other modes of transport in new territories.

Freedonia looked at the growing need for various types of midstream equipment, including compressors, valves and storage tanks.

The firm determined that steel pipe will continue to dominate, though plastic pipe will expand rapidly because of its use in gathering applications.